Is it still possible to become a part time dealer?

[MikeGarcia]

Originally Posted by buymycards

Adam made a good point concerning taxes. Every time that you make a dollar in profit you will need to pay 12.4 cents for Social Security taxes, 2.9 cents for Medicare taxes, plus, depending on your tax bracket, at least 15 cents for the IRS and maybe another nickel for state income taxes. So, that dollar of profit is down to about 65 cents after you pay the government.

...Rick , thank you , we appreciate your sharing your experiences and knowledge... but about this last post , might you know the dollar amount at which it is necessary for an amateur like most of us are , to do tax set-asides so as to comply with at least the federal tax regs ? At times , some years , I actually do come out a few dollars ahead of the game ; but I consider myself just a hobbyist buyer/seller and any profits are usually accidental and an unintended happy surprise.... do the federales share my la-la-land delusions ??

[GehrigFan]

As someone already mentioned, the hardest part is being both a collector AND dealer. It is very difficult to do both and keep them separate. The dealer side sees a nice breakup value in a lot, but when you get them in, the collector side thinks, "hmmm... these are nice, I think I'll keep them awhile!" Not to say you can't do both - it is just difficult.

I would strongly advise that you start "fresh" as a dealer, though - don't mix in the cards from your personal collection if possible. It is very difficult to reconcile taxes and records when you "deal" a card that was in your personal collection for years and didn't purchase it as a dealer. Keep diligent receipts of everything you spend - not just on cards, but travel to set up at shows, selling fees (eBay, PayPal, Auction Houses, etc.), etc.

Good luck!
Mark

[swarmee]

Want to be a part time dealer?

http://www.comc.com/Promotions/Port_Sale

Start by making offers there. No messy sending packages all over the world. COMC does it for you.

http://www.blowoutcards.com/forums/e...cesses-14.html

[Koufax32fan]

Tony Gordon is a part time dealer in the Chicago area and writes a blog about his experiences - http://www.fatdaddyssports.com/blog - if you read it you will learn about bad hotels, good eats and buying/selling cards.

[buymycards]

Hi Guys,

I don't know the exact tax rules. I keep very precise records and turn them over to my tax preparer every year.

Thanks for the tip on the blog. I spent an hour reading it and I am looking forward to reading the Archived items. I met Tony at the National and I am hoping to make it up to his Clarion show in Milwaukee.

Rick

[btcarfagno]

Anyone in a high tax bracket needs to know that the maximum tax on their profits is 28%. Not their regular tax rate. Plus self employment tax whatever your bracket it.

Tom C

[Exhibitman]

Originally Posted by btcarfagno

Anyone in a high tax bracket needs to know that the maximum tax on their profits is 28%. Not their regular tax rate. Plus self employment tax whatever your bracket it.

Tom C

No, that is the long term capital gains rate on cards you sell as an investor if held for more than a year [see IRS Topic 409]. And there would be no self-employment tax on that form of capital gain because it is not active business income. If you undertake a 'real' business and generate active income, whether via business entity filing its own return or Schedule C filing, you pay the regular marginal income tax rate and self-employment taxes but you can also take advantage of the full range of business deductions, like attending the National. As long as you are profitable 3 of 5 years: if you run perpetual losses the IRS may treat your business as a hobby.

[btcarfagno]

Originally Posted by Exhibitman

No, that is the long term capital gains rate on cards you sell as an investor if held for more than a year [see IRS Topic 409]. And there would be no self-employment tax on that form of capital gain because it is not active business income. If you undertake a 'real' business and generate active income, whether via business entity filing its own return or Schedule C filing, you pay the regular marginal income tax rate and self-employment taxes but you can also take advantage of the full range of business deductions, like attending the National. As long as you are profitable 3 of 5 years: if you run perpetual losses the IRS may treat your business as a hobby.

Right. That would be more of a one time thing as opposed to doing it as a business. That is what I meant. Brain fart.

Tom C

[batkidiii]

Well, I'm not looking to compete against anyone. I just want to be able to turn a small profit so I can continue enjoying my hobby. I have a young daughter who loves baseball, and cards, so I think she would get a thrill if I included her in a mini business venture with dad.

[edhans]

[QUOTE=Exhibitman;1462969]. As long as you are profitable 3 of 5 years: QUOTE]

I thought it was two years out of seven.

[parkerj33]

The best advice from above, is you make money on the buy-side. Know your market well, and you will not get into trouble. The easiest thing I found when starting out is to find a specialty and stick with it....For me, thats Topps Heritage. I strictly do that and have been for over 10 years. Met tons of people, made tons of deals, big and small, and have had a blast with it.

It can be time-consuming, so you have to have a passion, but if you are small, its easy to take a break from it too.

[Exhibitman]

[QUOTE=edhans;1463148]

Originally Posted by Exhibitman

. As long as you are profitable 3 of 5 years: QUOTE]

I thought it was two years out of seven.

That's for farming and some other specific industries whose lobbies got them relaxed rules.

[smtjoy]

I have helped build my collection for years doing this. 10 years ago I found that many times cards I desired were in lots with many cards I didnt need or want. I decided to bid aggressively but always had a max amount on anything. These lots started in the $100-500 range but over time and added savings these have been up to 10k+. I can say that 80% after selloff have ended at breakeven or above, most of the negatives were when I bid above my max chasing that hard to get card lol should have know better. These have come from most auction houses, my best deals have come from ebay, REA and H&S.

Some tips that really helped me-

Have a niche- an area where you are the expert and because of this knowledge you can separate the good deals from the bad.

Know sales values- You have to know what a card will sell for at auction as well as from BIN's, past eBay sales and VCP are very important, also know to cancel out the sketchy sales from Probstein, PWCC, etc that can inflate a true price.

Learn to maximize value- Learn the best way to sell your cards to maximize the value- eBay, AH's, eBay BIN's, Private Sale. This one is tough as each has their upsides. On hot cards or highest graded, 1/1 type I like to .99 auction on ebay the lower value (less than $200) and the more valuable to an AH. On scarce cards with few to none for sale on ebay, I like to first list card on ebay as an auction at the price I feel the value is at based on my bidding value I used to purchase said card (I get a chance for a bidding war but will not lose if no bidders). If it sells great, if not then I list as a BIN and let it ride in my store, I find they will sell over time you just have to have patience 3-5 years worth. On scarce cards where im not sure there will be two bidders I try to avoid AH's, I find they will sell low mainly because the one collector bidding will win them one bid increment above the dealer floor (most dealers bid on good lots, this is where having your niche pays off as you have a better idea on value vs a dealer that sells everything and is not an expert). I have had great luck on private sales, most of these came from buyers reaching out to me, either thru ebay, net54 or registries.

Set a max and stick to it- since you are doing this to grow your collection, you must take a business approach vs a personal "I got to have this card" approach. Passing on bad deals is a must and will happen a lot more than good buys, for me I always took it as a challenge to make good decisions.

[PolarBear]

No, I'm sorry. It is no longer possible.

[glchen]

Originally Posted by smtjoy

I have helped build my collection for years doing this. 10 years ago I found that many times cards I desired were in lots with many cards I didnt need or want. I decided to bid aggressively but always had a max amount on anything. These lots started in the $100-500 range but over time and added savings these have been up to 10k+. I can say that 80% after selloff have ended at breakeven or above, most of the negatives were when I bid above my max chasing that hard to get card lol should have know better. These have come from most auction houses, my best deals have come from ebay, REA and H&S.

Some tips that really helped me-

Have a niche- an area where you are the expert and because of this knowledge you can separate the good deals from the bad.

Know sales values- You have to know what a card will sell for at auction as well as from BIN's, past eBay sales and VCP are very important, also know to cancel out the sketchy sales from Probstein, PWCC, etc that can inflate a true price.

Learn to maximize value- Learn the best way to sell your cards to maximize the value- eBay, AH's, eBay BIN's, Private Sale. This one is tough as each has their upsides. On hot cards or highest graded, 1/1 type I like to .99 auction on ebay the lower value (less than $200) and the more valuable to an AH. On scarce cards with few to none for sale on ebay, I like to first list card on ebay as an auction at the price I feel the value is at based on my bidding value I used to purchase said card (I get a chance for a bidding war but will not lose if no bidders). If it sells great, if not then I list as a BIN and let it ride in my store, I find they will sell over time you just have to have patience 3-5 years worth. On scarce cards where im not sure there will be two bidders I try to avoid AH's, I find they will sell low mainly because the one collector bidding will win them one bid increment above the dealer floor (most dealers bid on good lots, this is where having your niche pays off as you have a better idea on value vs a dealer that sells everything and is not an expert). I have had great luck on private sales, most of these came from buyers reaching out to me, either thru ebay, net54 or registries.

Set a max and stick to it- since you are doing this to grow your collection, you must take a business approach vs a personal "I got to have this card" approach. Passing on bad deals is a must and will happen a lot more than good buys, for me I always took it as a challenge to make good decisions.

I think this is really good advice here. Scott also had good advice on this topic from a similar thread a few years ago: Link